In reality what Target-2 did was take the credit monitoring out of the system.

By giving national central banks something to do and allowing them to deal with each other, it allowed the system to pretend that Eurozone central banks would never default and that payment imbalances were not a problem.

The credit risks of the payments system, which would have been handled by the banking system, were transferred to central banks and allowed to grow to their current monstrous size.